Fed Decision and CRE
Commercial Observer
Connecting and informing industry leaders of trends and individuals defining the global commercial real estate landscape
The Federal Reserve again held its benchmark borrowing rate steady, but clearly signaled that the first rate cut since early 2020 was imminent. What’s that mean for commercial real estate? Also for today: The world’s leading coworking operation is expanding big-time in California. —Tom Acitelli
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— Tom Acitelli, Deputy Editor
Fed Pauses Interest Rates Again But Cuts Could Come Later This Year
The last time the Federal Reserve slashed interest rates was a 100 basis point cut to between 0 percent and 0.25 percent on March 16, 2020, at the beginning of the COVID-19 pandemic. Charles “CJ” Follini, professor of real estate at New York University, said any potential interest rate cut that may arrive in late 2024 won’t matter much for the commercial real estate industry due to the amount of competing government debt getting placed in the market. “A lot more government supply is coming online next year so it's an unfortunate timing moment where commercial real estate has more liquidity than ever before, but so does the government,” said Follini, who is chief investment officer at Noyack Alternative Investments. “The commercial real estate sector's biggest competitor is not each other and it's not other asset classes, it is the government’s need for debt.”
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Coworking Provider International Workplace Group Adds 17 Locations to California
The globe’s leading coworking space provider is about to get even bigger, expanding into the coastal state where the U.S. coworking trend began. Switzerland-based International Workplace Group plans to add 17 new locations to its workspace portfolio in California, bringing the company’s total number of locations in the Golden State to 196. The new spaces range from 6,000 to 25,000 square feet, with 95 percent under a managed partnership agreement with building landlords. Such agreements allow local landlords to operate the hybrid work centers with the support of International Workplace Group resources, a company spokesperson told Commercial Observer.
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